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Corporate governance: earnings management linkages: impact of audit committee composition and operational characteristics

Corporate governance: earnings management linkages: impact of audit committee composition and... Our study documents a comprehensive simultaneous analysis of the association between five-audit committee composition and operational characteristics features and earnings management based on a sample of 485 organisational-years of Singapore publicly traded organisations. Findings provide only partition support for the view organisations with a higher proportion of independent audit committee members are more effective at constraining earnings management. Organisations with audit committees that are more diligent and/or lack the presence of independent directors serving simultaneously on a substantial number of boards and committees are more effective at constraining earnings management. Audit committee expertise and the presence of a senior executive director on the committee do not appear to influence the committee's ability to constrain earnings management. Our findings are robust to alternative income-incentives facing corporate management and entices associated with different levels of ownership concentration. Overall, our findings are rich with policy and practical implications. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Accounting, Auditing and Performance Evaluation Inderscience Publishers

Corporate governance: earnings management linkages: impact of audit committee composition and operational characteristics

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Publisher
Inderscience Publishers
Copyright
Copyright © Inderscience Enterprises Ltd. All rights reserved
ISSN
1740-8008
eISSN
1740-8016
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Abstract

Our study documents a comprehensive simultaneous analysis of the association between five-audit committee composition and operational characteristics features and earnings management based on a sample of 485 organisational-years of Singapore publicly traded organisations. Findings provide only partition support for the view organisations with a higher proportion of independent audit committee members are more effective at constraining earnings management. Organisations with audit committees that are more diligent and/or lack the presence of independent directors serving simultaneously on a substantial number of boards and committees are more effective at constraining earnings management. Audit committee expertise and the presence of a senior executive director on the committee do not appear to influence the committee's ability to constrain earnings management. Our findings are robust to alternative income-incentives facing corporate management and entices associated with different levels of ownership concentration. Overall, our findings are rich with policy and practical implications.

Journal

International Journal of Accounting, Auditing and Performance Evaluation – Inderscience Publishers

Published: Jan 1, 2004

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